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Part I: Small Business Survival During Tough Economic Times

"Mind Your Business", by Sheila McCumby, February, 2023
Part I - this is the first part of a two-part article aimed at addressing small business survival during lean times. In this blog post, we will share suggestions from financial experts to help you stay afloat and prosper during the forecasted economic storms.

Owning a frame shop is akin to having a newborn baby; we experience constant worry and little sleep. Grim economic forecasts in the media cause us even more anxiety and sleepless nights. Predictions of an upcoming recession could mean that our little business/baby may have colic, how are we going to make ends meet?

It’s overwhelming: Recently gazillionaire industry giants have laid off thousands of workers. With higher costs and unemployment, consumers have less disposable income to spend on framing. Meanwhile, our materials and basic operating costs are increasing. With the war going on in Ukraine, and a worldwide economic downturn, how can small businesses expect to flourish during these lean times?

Economic times

Here are some suggestions from financial experts to help you stay afloat and prosper during the forecasted economic storms:

1. Manage your business's cash flow

If you don’t have a business savings account, start one.

Setting aside a small percentage of your profits monthly will help you supplement the lean times. Talk with a reputable financial advisor and invest that cash into short-term interest-bearing accounts that will make your money work for you and yield a higher return. Utilize your financial reports in FrameReady. The accounts receivable report is available at the click of a button. Be assertive in collecting those past due debts owed to you now, as customers may not be able to pay later when their cash flow is reduced to a trickle in a recession.

2. Protect yourself

If you take advantage of your FrameReady features, then you will be better prepared for the coming economic storms and will hopefully prosper in the coming year.

Always collect a minimum 50% deposit, on all custom orders and encourage customers to pay in full when they can.

Be smart and draw up contracts when dealing with larger commercial customers. It’s a great feeling to score a $10,000+ order, but bid on those big jobs carefully. It’s better to lose out on a bid, than to lose money and time on a proposal where you underestimated the cost. One bad bid can destroy a business. Use FrameReady's Job # feature to keep those big orders organized and track deadlines and payments. Make corporate clients pay deposits up front and create a positive relationship with the go-to A/P person at the company when you need to collect payment.

3. Be smart about debt

Now may not be the best time to expand, remodel or take out an SBA loan to grow your business.

Use FrameReady’s sales reports to project what your future sales may be, compare those sales year to year. You can do a contingency projection that this year may have a 10-20% revenue decrease and prepare for it. Keep your personal credit squeaky clean in case you need to take out a short-term loan in an emergency.

4. Manage your inventory

Every penny that you make comes into your shop through your freight receiving door.

If you are not managing your inventory, you are not managing your business. FrameReady has fantastic inventory management options. Run your usage reports for moulding, matboard and glazing. These reports will help you order smarter. FrameReady moulding and matboard usage reports show which components are your top sellers, and you can purge those slow-moving inventory clunkers that should be replaced with something that will sell better. You may also get discounted pricing on your top selling items by ordering in bulk. Don’t be afraid to approach your sales rep for additional markdowns when you’re bidding for larger jobs. Even a small discount of 3-5% will positively impact your profits.

This is Part I of a two part series "Small Business Survival During Tough Economic Times". You can find Part II here.

"Mind Your Business", by Sheila McCumby, February, 2023